Summary
- In order to avoid a “last man standing” problem when employees take vacation, the campus maintains a pool of funds to help cover the future cost of vacation leave using a Vacation Leave Assessment (VLA).
- Campus funds are assessed monthly to reflect the liability incurred by the University for e ployees who earned vacation. Assessed revenues are “pooled” in the vacation leave reserve account. When vacation is taken or paid, the departmental account receives a credit and the campus vacation leave reserve account is debited.
- By policy, UCSF funds only current fiscal year needs for vacation leave taken and a modest reserve balance; the total leave liability is not fully funded.
- The goal of the VLA analysis process is to avoid a large reserve account surplus or deficit. The campus targets a vacation leave reserve balance of $2.5 million.
- The assessment methodology incorporates individual employee vacation leave earned, composite benefits rates, and a campuswide vacation leave utilization factor.
Vacation Leave Assessment Formula
- The amount assessed for each employees is based on gross salary, benefits eligibility, vacation
leave earnings rates, actual accrual of leave, and a vacation leave utilization adjustment.
- Gross Pay excludes DOS codes not eligible for vacation leave accrual as well as catastrophic leave donations.
- Benefits Rates are composite rates for four employee groups based on eligibility for FICA and UCRP. 98% of campus employees belong to the “Benefits with UCRP and FICA” group.
| Employee Group | 2016-17 Rate |
|---|---|
| Benefits with without UCRP or FICA | 12.7% |
| Benefits with UCRP but without FICA | 18.6% |
| Benefits with UCRP but without FICA-Safety | 32.9% |
| Benefits with both UCRP and FICA | 32.6% |
- The Leave Earnings Rate is based on the individual employee’s years of service (employees with more years of service earn more vacation leave.)
- The Accrual Factor adjust the employee’s estimated leave earned by the amount of vacation leave lost due to the employee exceeding the maximum allowable vacation leave accrual, also based on years of service.
| Years of Service | Hours of Leave Earned per Hour Worked | Maximum Vacation Leave Accrual |
|---|---|---|
| Less than 10 years | 0.057692 | 240 hours |
| Greater than 10 but less than 15 years | 0.069231 | 288 hours |
| Greater than 15 but less than 20 years | 0.080769 | 336 hours |
| 20 or more years of service | 0.092308 | 384 hours |
- The campuswide Utilization Factor adjusts the accrual assessment for the amount of vacation that employees are expected to take during the year. In 2017-18, employees are expected to take vacation leave equivalent to about 94% of the amount of vacation leave they will earn.
VLA Monitoring Process
- Establish a campus assessment utilization factor at the beginning of the year. Budget and Resource Management (BRM) develops a model at the beginning of the year to project the monthly vacation leave reserve account balance for the entire year. The model incorporates the prior year reserve balance and vacation usage trends to calculate a single rate for the campus.
- Establish the overall benefit rate for the four benefit groups at the beginning of the year. Benefits rates are calculated at the beginning of each year.
- Track the vacation leave reserve account balance. Vacation usage, assessment levels, and liability account balances are reported and compared to projected balance model monthly.
- Adjust the utilization factor to stay within the established account balance goal. BRM aims for a $2.5 million dollar vacation leave reserve account balance at the end of the fiscal year.
UCSF Health
- UCSF Health does not use a vacation leave assessment. They record a liability, but do not cr ate a reserve. When staff take vacation, the home department is charged for the staff time on vacation and the central liability is reduced.